The Complete Header Bidding Resource Center

Header bidding takes multiple bids for a particular ad unit, allows them to compete in a unified auction and selects the winning bid to fill the ad slot.

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Before header bidding, the so-called “waterfall” approach dominated the programmatic advertising landscape. Basically, there would be a list of bidders. The request for bids on particular pieces of inventory would go to one bidder first and then to the next and so on, until one of them bid an acceptable amount of money on the inventory.

This created a problem. Publishers using this method miss out on potential revenue because they’re at the mercy of the first bidder to make a bid. Someone further down the chain might have been willing to bid more, but the publisher would have never known.

Header bidding solves that problem. The waterfall approach prioritizes the first bidder, but header bidding prioritizes the highest bidder. Header bidding is truly a publisher-first solution, aiming to truly maximize revenue for the publisher, by letting all bids compete. And the auction happens before an ad server is ever called. 

While the waterfall method pings the ad server with an estimated cost per mille (CPM), header bidding completes the auction and either allows the publisher or header bidding partner to pick the best one, or returns all the bids to the server, which will then pick the best in real time and in conjunction with direct demand and similar line items.

For publishers, the primary benefit of header bidding is clear: increased revenue. In fact, many publishers using header bidding have increased their CPMs for premium inventory by up to 50%, according to Digiday.

But there’s more to it than simply a jump in CPMs, although that’s a pretty compelling benefit. Because header bidding allows publishers to branch out and use multiple supply-side platforms (SSPs), average yield can increase due to an increased fill rate and better allocation of impressions.

Beyond CPMS and yield, publishers who use header bidding have more control. They can pick and choose which bidders are allowed to participate in the simultaneous auctions of their inventory. In some cases, they can even prioritize certain agencies and advertisers in their auctions to keep demand-generating relationships going strong.